bank rates

Flagstar’s (So-So) CD Rates Vary By State

Believe it or not, Flagstar Bank offers better returns on two CDs to online customers than to those who live near its brick-and-mortar branches.

This Michigan-based bank has 162 locations in Georgia, Indiana and Michigan and a specific website for customers in that footprint,

Everyone else in the United States is considered “out-of-footprint,” and has a separate website,

Logically, you’d think that the best rates would go to those who consider Flagstar Bank their local bank, part of their community.

But it’s not always so.

Flagstar Direct has the best – and well-above average – interest rates on two terms.

The site offers only two CDs, a 6-month CD paying 0.70% APY and a 12-month CD paying 0.95%.

(You can always find the best nationally available returns on our CD Rates Leaderboard.)

Over at, those same terms have rates of 0.40% APY and 0.60% APY in Michigan and 0.65% APY and 0.85% APY in Georgia and Indiana.

I called and asked customer service why, and was told that it’s just the way the system is set up.

And there’s no getting around it, since rates are based on your ZIP code, which you have to enter in order to buy a certificate of deposit.

More terms are available at, and a few aren’t half bad for Georgia and Indiana:

3-month CDs for 0.10% APY in Michigan and 0.15% APY in Georgia and Indiana, versus an average rate of 0.16%.

24-month CDs for 0.75% APY in Michigan and 1.14% APY in Georgia and Indiana, versus an average rate of 0.62% APY.

36-month CDs for 0.94% APY in Michigan and 1.50% APY in Georgia and Indiana, versus 0.84% APY.

60-month CDs for 1.75% APY in Michigan and 1.99% APY in Georgia and Indiana, versus 1.45% APY.

Flagstar is in the process of selling its branches in Indiana and Georgia, so big changes are on the way for its customers in those states this fall.

You can compare Flagstar Bank’s returns with the best CD rates from scores of other banks in our extensive database.

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Comments (2)
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2 Existing Comments
  1. Kathy at Bankaholic said:
    on September 14th at 09:20 am’s 12-month CD is now paying just 0.50% APY to Michigan residents, but the bank is also offering a 13-month CD that pays 1.05% APY.

  2. Kathy at Bankaholic said:
    on September 28th at 08:40 am

    Flagstar Direct’s 12-month CD rate is now 1.00% APY.